Love or Hate? What I Think of the PayPal USD

Baby, I compare you to a kiss from a rose on the grey. Ooh, the more I get of you, stranger it feels - Seal

Paypal’s stablecoin move. Do we think it’s a good or a bad idea? Let’s find out today.

Some reasons are evident why this can be a big flop:

• Liquidity crisis: Stablecoin markets are 50+ billion dollar markets. How will a public company guarantee a $1 USD: PayPal USD guarantee? Well, fractional banking, here we go again.
• Depeg scenarios: We already saw the USDC collapse earlier this year (when it was backed by US treasuries). PayPal USD has a similar reserve plan, so a similar fiasco plan.
• Regulatory chokehold: If the SEC comes after PayPal and its crypto offerings, what are the chances PayPal backs out in an instant? Very high because crypto is not PayPals’ bread and butter.
• Privacy compromises: PayPal is an OG fintech company with extensive financial reporting. PayPal will always play nice with financial regulators.

Now, playing a devil’s advocate let’s look at how PayPal USD may be good news for crypto.

• Stablecoin competition: PayPal’s USD will put out more competition for the existing stablecoin market. This is also better for stablecoin liquidity in the crypto market.
• Crypto fiat onramp simplified: many exchanges and banks are well integrated with PayPal. This will make the whole stablecoin <> crypto exchange space much more simple, easy, and hassle-free.
• Regulatory compliance: Yes, we do need regulation folks. Having more stables with regular compliance is good for the long-term future of crypto.
• Market growth: With a large fintech company like PayPal entering the crypto game, it will only give more confidence to other fintech players. This is absolutely fantastic for the longevity of the crypto market.

In my opinion, PayPal USD has more good to offer than bad for the cryptoverse. Even though in the short-term it may be subjected to an uncertain fate.

Just my humble opinion.